Business in brief in 28 September 2012
The Ministry of Industry and Trade announced that it would organize a business trip for domestic enterprises to seek business opportunities in Egypt and Sudan from November 16-24. The trip, to be led by deputy minister Le Duong Quang, would be a good chance for local firms to better understand demand in these markets, meet directly with native businesses to advertise their products and exchange co-operation opportunities, the ministry said. Egypt is one of Vietnam’s most important export markets. Vietnam’s exports to the country hit $256 million in 2011, up 47 per cent year-on-year. Sudan, meanwhile, is considered an emerging market for Vietnamese exporters even though two-way trade reached a modest $24.6 million in 2011 and Vietnam enjoyed a trade surplus of $20.4 million.
Two-way trade between Vietnam and India reached over US$2.49 billion in the first eight months of this year, representing a modest increase of 2.2 per cent over the same time last year, according to the General Department of Customs’ statistics. Vietnam earned above $1 billion from exports to India, up 12.9 per cent, while its imports from the country fell by 4.5 per cent to $1.44 billion. Among Vietnam’s key export items were mobile phones and components, machinery and other accessories, natural rubber, computers, electronic products and spare parts, and coffee.
Moody’s Investors Service has downgraded Vietnam’s foreign- and local-currency government bond ratings by a notch to B2, citing stresses in the banking industry from a prolonged credit boom and a darkening economic backdrop. The agency said the ratings outlook was now stable, meaning that upside and downside risks are balanced. "The ratings downgrade was driven by the intensification of banking system vulnerabilities because of the overhang from a prolonged credit boom and the subsequent tightening in policy," the agency said in a statement released on Friday. Vietnam’s long-term foreign currency (FC) bond ceiling remained at B1, while its long-term FC deposit ceiling was downgraded to B3 from B2. Its local currency bond and deposit ceilings were also unchanged at Ba2.
The total outstanding loans in Vietnam’s banking system rose an estimated 2.35 percent as of Sept. 20 from the end of last year, the government said on Thursday. Money supply growth is estimated at 10.37 percent as of Aug. 31 from the end of last year while deposits rose 11.23 percent, the government said in a statement.
Telephones and spare parts ranked second among Vietnam’s top ten export earners in the first eight months of this year. The General Department of Customs’ latest statistics showed they enjoyed a record year-on-year rise of 123% to US$7.977 billion in export revenue. For many months, they have been listed among export items earning more than US$1 billion each, fetching US$2.69 billion in the first quarter, up 161.9% compared to the same period last year, and US$5.03 billion in the first half of this year. Such impressive results are owing to foreign businesses, including Samsung, Intel, Cannon, Compal and Foxconn, operating in Vietnam, which make up 80% of the domestic market share and 90% of total export turnover. Vietnam’s key export markets are the EU, Russia and Saudi Arabia. Vietnam’s electronic sector is likely to earn an export turnover of US$15-16 billion by the end of 2012, the Vietnam Electronic Industries Association (VEIA) forecasts.
Vietnam and Malaysia will strengthen bilateral cooperation in developing the cooperative movement on an equal and mutually beneficial basis. To this effect, a memorandum of arrangement (MoA) was signed by representatives from the Vietnamese Ministry of Planning and Investment (MPI) and the Ministry of Domestic Trade, Cooperatives and Consumerism (MDTCC) of Malaysia in Kuala Lumpur on September 26. Under the MoA, the two countries will boost trade between their cooperatives through import-export activities or joint venture projects as well as expanding markets for cooperatives’ products and services. They will promote the exchange of information and experts, and organize training courses to improve the capacity of cooperative managers. The two sides decided to set up a joint working group to realize the MoA. Vietnam now has about 19,500 agricultural and non-agricultural cooperatives.
VietinBank and LotterMart have just signed a comprehensive cooperation agreement in a ceremony held in Ho Chi Minh City on September 27. VietinBank and LotteMart agreed upon numerous fields of cooperation. Accordingly, VietinBank pledged to provide financial and banking services for LotteMart chain throughout Vietnam. It is expected that the cooperation will help LotteMart increase convenience for its customers and expand its network in Vietnam. LotteMart is a component of Lotte, the 5th biggest group in the Republic of Korea specializing in distribution, foodstuff, petro-chemistry, construction, entertainment and tourism… Established in Vietnam in 2008, LotteMart is a dominant supermarket trademark, with two centers in Ho Chi Minh City. It is planning to open two new supermarkets in Da Nang and Dong Nai this year.
Petromacareo, a joint venture between Vietnam and Venezuela, has started exploiting oil at the Orinoco oil belt with an initial daily output of 800 barrels. The figure is expected to reach 40,000 barrels per day after one year of operations, according to the Venezuelan News Agency. Petromacareo is extracting oil at the Junin 2 bloc in Venezuela’s Orinoco oil belt, the world’s largest oil reserve. The Junin 2 bloc is estimated to hold reserves that could fill 37 billion barrels. The joint venture has been allowed to process and trade oil and other oil products during the next 25 years. This is one of the Vietnam’s biggest oil and gas projects abroad. It’s reported that Petromacareo has planned to invest nearly US$3.9 billion in infrastructure, drilling wells and processing of oil by 2021. Its productivity has the potential to reach 200,000 barrels per day.
Confectioner Kinh Do (listed on HOSE as KDC) announced yesterday that Japanese company Ezaki Glico has become a strategic shareholder. The foreign partner holds 14 million shares, or 10 per cent of KDC total’s equity, which were acquired in the local firm’s private placement earlier this year. The deal’s value was not disclosed. Also yesterday the two companies signed an agreement for KDC to distribute the partner’s Pocky snack in Vietnam. Other Glico products are planned to be sold by KDC to reach a sales turnover of VND1 trillion (US$46 million) within four years.
The Kien Giang Economic Zone Authority has recently granted an investment license to Kien Giang Animal Feed Limited Co to develop a VND290 billion (US$13.8 million) animal feed plant in the provincial Thuan Yen Industrial Zone. Covering a total area of 2.8ha, the plant will provide 150,000 tons of products annually when it comes into operation in 2015. Its construction is expected to begin in April next year.
